[p2p-research] Profit Measures the Payer's lack of Physical Source Ownership

[Ryan Lanham]

On 2/12/10, Patrick Anderson <agnucius at gmail.com> wrote:
>
> A potential Consumer will pay a Price above Cost when he does not have
> sufficient ownership in the Means of Production because he is
> *dependent* upon those current owners.


Costs will vary.  What your outcome is...is actually correct.

I suspect what is happening is that marginal costs are approaching zero
because of technology innovation and distributions.  The Marxian stuff of
owning means of production is meaningless.  People go to restaurants even
though they have access to food and fire.  The difference is that something
that is machined (i.e. made by a robot) rapidly approaches zero costs.

This imbalance can be incrementally corrected by treating that
> overpayment as the payer's investment in the growth of that
> organization so that Capital is no longer 'accumulated' into the hands
> of the few, but is transparently 'distributed' back to the very person
> who paid it as a deed of property ownership in more Physical Sources
> needed for that type of product. It is a subtly 'forced' investment.


Capital accumulation is meaningless.  Again, the Marxian bias is all wrong.
It is the capacity to generate profits that is all important.  Any venture
capitalist will tell you the old saw from the industry that all capital is
evil.  You don't want means of production, you want means of controlling
cash flows.  Restaurants don't make money because they control stoves, they
make money because they have rare chefs, brand identity, etc.

>This causes profit to approach zero (as price approaches cost) and
>control to be move to the hands of those willing to work instead of
>being centralized into the hands the payees who treat profit as a
>reward for themselves.

Actually, the point is substitution costs, not production costs.  No one
cares nor tracks what it costs to produce something.  They care how much
they have to pay to get something.  Prices are set by demand and
supply...not by production costs.  That's why the whole discussion of
scarcity matters.

>Treating profit as a reward for the current owners is the physical
>basis of Usury.

Not sure what this means...but usury is exactly what isn't happening.  Usury
is the charging of unrealistic or unfair costs of capital.  Right now the
problem isn't usury...its lack of available credit even at low rates because
so few people have profitable ideas.

Treating profit as an investment from the payer is a negative-feedback
against primitive accumulation allowing growth that is both sufficient
(according to the amount the consumer is willing to overpay) and
autoleveling (because profit==0 when an Object consumer has sufficient
Source ownership).

Specialization is what increases investment.  The problem is that technology
is making specialization irrelevant.  Anyone can produce stuff (replacement
cost stuff) at a low cost.

If you want to understand free and open economics, you need to understand
technology economics.  What is happening is that production costs are
falling rapidly and that few projects can generate long-term cash streams
(this is the international financial crisis of credit in a nutshell).
Meanwhile, replacement costs are dropping as people find lower cost
alternatives.  If your statin drug isn't as effective as fish oil and
vitamin D, in the long run, it is hard to convince someone to pay high
prices for the statin.  The same is true of a browser or a C compiler.  If
those are good and free, why pay?

What is working in capitalism now is hard to replace products of high
quality where there is no substitute (e.g. iPods).  What is not working is
tools where substitution is relatively easy with low cost items.  That's why
Nike and Chanel are terrified of knock-offs of high quality, and BMW,
Nokia and Apple are not.  They know they cannot be easily copied because
they've invested in technology, not brand.

The logical outcome you see is still essentially the same.   Profitable
projects are declining and local production is increasing.  Replacement is
the question.  Restaurants thrive because they offer something someone
cannot get at home...service and atmosphere.  Movie theatres thrive less
because what they offer is not as exciting.

Over time, as more and more IP becomes "free" or extremely low cost, it will
be irrelevant because those items not free will be so easily replaced at
low replacement costs.

That's what is going on, in my view.
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